‘A significant part of today’s cacao supply is at risk,’ chocolate group CEO warns

A tub of melted chocolate is warmed at the Barry Callebaut Chocolate Academy in St.-Hyacinthe, Que. on Jan. 30, 2008. (THE CANADIAN PRESS/Ryan Remiorz)

Swiss chocolate group Barry Callebaut reported a drop in annual net profit on Wednesday as high cocoa prices and falling consumption took a bite out of earnings.

Barry Callebaut, whose financial year runs through the end of August, said profit after tax fell 1.3 per cent to 188.4 million Swiss francs (US$233 million) in the 2024-2025 period.

Revenue rose 42.4 per cent to 14.8 billion francs as the supplier of cocoa and chocolate products passes fluctuations in raw material prices on to clients.

In terms of volume, however, sales fell 6.8 per cent to 2.1 million tonnes, notably in Europe and North America were prices for chocolate products rose.

Barry Callebaut supplies cocoa and chocolate products to major food groups such as Oreo cookie producer Mondelez, KitKat maker Nestle and Magnum ice cream owner Unilever.

“The past fiscal year was marked by exceptional and unprecedented volatility in the cocoa and chocolate markets, impacting both Barry Callebaut and our customers,” chief executive Peter Feld said in an earnings statement.

Feld, however, later said in a conference call that he was “cautiously optimistic on supply” for the crop cycle over the next six months.

Cocoa prices have soared for two consecutive years, reaching a historic high in December 2024 at $12,931 per tonne in New York and 10,100 pounds per tonne in London.

Top cocoa producers Ivory Coast and Ghana were hit by heavy rains that encouraged the spread of pod disease. This was followed by droughts.

Prices have since retreated but remain volatile amid better harvests and a drop in demand. The commodity traded at $6,467 in New York on Tuesday -- still more than twice as high as in 2022.

The higher costs have prompted chocolate makers to raise their prices, dulling consumers’ appetite for the sweets.

“Short term, the market seems to have found a price that works for farmers, processors our customers and consumers. Too early to tell, but cautiously positive,” Feld said.

But, he added, “the long term structural challenges are not resolved. A significant part of today’s cacao supply is at risk due to climate change and disease.”